Walker calls for income tax cut in budget plan

Governor unveils $68 billion two-year spending plan

Gov. Scott Walker is proposing an income tax cut that would save a family of four earning about $80,600 annually $212 over two years.

Walker unveiled details of the $343 million income tax cut in the budget he delivered to state lawmakers on Wednesday.

His plan includes no general sales tax increases and would keep property tax levy limits in place so the projected increase statewide on the median valued home is less than 1 percent.

The tax cut would lower rates for income up to $161,180 for individuals and $214,910 for married couples filing jointly.

Walker said that cut targets the middle class and will help the state's economy grow.

The governor didn't mention that the income tax cut will add to a structural deficit over the next two years, although his administration said it's paid for upfront by a surplus the last two years.

"Our tough but prudent decisions two years ago put us in a position to further reduce the tax burden of our citizens while still investing in our priorities," Walker said.

Walker's state budget increases spending 3 percent in the first year and 2.1 percent in the second year.

Walker introduced the $68 billion two-year spending plan to the Legislature on Wednesday. His proposal will be debated by the Legislature's budget committee over the next four months, then be voted on by both the Senate and Assembly sometime before it takes effect in July.

His budget would end with a $43 million balance but leave the state with about $188 million in ongoing bills that aren't funded. Eliminating the so-called structural deficit has been a goal for many lawmakers for years.

The plan includes an expansion of private school vouchers, continuation of spending limits for public schools, a tightening of Medicaid eligibility and an income tax cut.

On schools, Walker said he's tying K-12 funding to performance. Democrats sat in their seats for most of that part of the speech, especially when the governor said he was looking to expand the school choice program.

"We give low-income and middle-class families an opportunity to also choose a viable alternative for their sons and daughters," Walker said.

But the Republican head of the Senate Education Committee said the school choice proposal will face scrutiny in the Legislature.

"The choice stuff may not be in the budget at all, or there could be some changes, serious changes, that needs to happen," said Sen. Luther Olsen, R-Ripon.

In response to the speech, Democrats said Walker's budget, particularly the proposed tax cut, hurts the middle class.

The proposed tax cut targets people earning about $161,000, and Rep. Cory Mason, D-Racine, said people who makes that much aren't the taxpayers who need help.

"I'm from Racine, and I don't know what color the sky is in Scott Walker's world, but where I come from (that) ain't middle class, so I'm anxious to see how this affects real working people," Mason said.

Democrats also said the governor's plan will hurt public schools and leaves a lot of questions unanswered.

They went on to say the budget will make it harder for people to qualify for Medicaid and will decrease the availability for affordable health care.

Walker is also proposing hiring 710 new state employees over the next two years.

The Department of Health Services would see the biggest increase with an addition of 280 positions. The governor said 117 are needed to meet mandates under the federal health care overhaul law, 85 are needed to improve Medicaid "integrity and efficiency" and 78 are needed to expand community-based mental health services.

There would be 218 new workers at the Department of Transportation. Of that, 180 would be new engineering and engineering support positions that are expected to reduce government's costs for hiring outside consultants by $5.6 million annually.

Walker's total transportation budget would be $6.4 billion, a $500 million increase over the last state budget.

The spending plan calls for using a mixture of gas taxes, vehicle registration fees, the state's general fund, the petroleum inspection fund and bonding toward rebuilding Milwaukee's Zoo Interchange and Hoan Bridge, improving harbors, preserving railroad tracks and training new State Patrol recruits.

He's also proposing adding 67 new auditors and investigators at the Revenue Department.

Walker's budget would lay out more than $7 million for raises for assistant prosecutors and public defenders.

The budget would provide $4.4 million for raises for assistant district attorneys. It also would provide nearly $3 million for raises for assistant attorney generals and assistant public defenders. Walker said the raises are necessary to retain experienced staff and ensure effective prosecutions.

The public safety portion of the budget also calls for police to collect DNA from anyone arrested on suspicion of a felony and a host of misdemeanors. Walker has been signaling for months the spending plan would include that initiative.

His budget also would require GPS monitoring for high-rise offenders subject to restraining orders and eliminating the state Office of Justice Assistance.

The budget Walker released Wednesday would provide an additional $24 million to reduce nonpoint water pollution as well as $85,000 for measuring lake water quality.

The budget would implement a number of recommendations a Texas researcher made to the state Department of Natural Resources last summer on how to improve the agency's relationship with deer hunters, including creating mini-hunts, creating updated maps of the state and continuing chronic wasting disease surveillance.

The budget also would allow the DNR to use $10.5 million in stewardship land acquisition dollars on road repairs and boat access improvements on stewardship property as well as for renovations at the Kettle Moraine Fish Hatchery.

Walker is also proposing a statewide elimination of residency laws that require employees to live in the city or school district where they work.

Milwaukee city officials, including Democratic Mayor Tom Barrett, oppose such a move, which Walker had indicated he may pursue before unveiling his plan. The city's residency rule on the books since 1938.

Removing the residency requirement for Milwaukee schools has been debated for years in the Legislature but never passed. The residency requirements vary across the state and in some places, like Madison and Green Bay, it applies only to agency heads and not rank and file workers.

Copyright 2013 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.